Neogen Corporation (NEOG)

Payables turnover

		Nov 30, 2024	Aug 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019
Cost of revenue (ttm)	US$ in thousands	1,371,451	905,083	932,892	915,465	935,907	830,479	723,301	622,394	482,567	463,396	446,232	425,625	403,608	387,925	369,635	355,939	349,990	344,910	346,791	343,600
Payables	US$ in thousands	79,574	61,464	89,748	112,184	90,210	76,669	60,494	79,251	27,002	34,614	23,548	34,222	22,414	23,900	23,257	20,697	22,537	25,650	18,994	19,567
Payables turnover		17.23	14.73	10.39	8.16	10.37	10.83	11.96	7.85	17.87	13.39	18.95	12.44	18.01	16.23	15.89	17.20	15.53	13.45	18.26	17.56

November 30, 2024 calculation

Payables turnover = Cost of revenue (ttm) ÷ Payables
= $1,371,451K ÷ $79,574K
= 17.23

Neogen Corporation's payables turnover ratio indicates how efficiently the company is managing its accounts payable. The payables turnover ratio is calculated by dividing the total purchases made during a period by the average accounts payable balance for the same period.

Analyzing the data provided over multiple periods, we can observe fluctuations in Neogen Corporation's payables turnover ratio. For instance, from November 30, 2019, to February 28, 2022, the payables turnover ratio ranged from a low of 7.85 to a high of 18.95. This variability suggests changes in the company's payment practices and supplier relationships during these periods.

A higher payables turnover ratio generally indicates that the company is paying its suppliers more frequently, which may be a sign of strong liquidity or effective working capital management. Conversely, a lower payables turnover ratio could imply that the company is taking longer to pay its suppliers, which may have implications for supplier relationships and cash flow management.

It is important for Neogen Corporation to monitor its payables turnover ratio over time to ensure that it strikes a balance between efficient cash flow management and maintaining healthy relationships with suppliers. Fluctuations in this ratio may warrant further investigation into the company's procurement and payment processes to identify any areas for improvement.